Forest Development Corporations

After the recommendation in the Interim Report of the National Commission on Agriculture (NCA 1972) on ‘Production of Man-made Forests’, many State Governments in India established Forest Development Corporations (FDCs) to work on commercial lines by raising industrial plantations of teak, eucalyptus, bamboo etc., to enhance the production of forest produce, to restore the productivity of degraded forest areas, to harvest and undertake trade to timber and Non-timber Forest Products (NTEPs), to own and run forest based industries, to provide support to farmers for marketing their forest product, and to provide consultancy in raising bio-aesthetic plantations etc. Most of the FDC were created during 1970s. These FDCs can mobilize bodies under the Companies Act, or any such similar Act, with a memorandum and articles of association of the company. The powers of managing the FDC are vested with a board of directors which are constituted by the state government. The board consists of official and non-official directors. Such corporations exists in 22 states (except in Assam, Manipur, Mizoram, Nagaland, Rajasthan and Sikkim) and in the UT of Andaman & Nicobar Island. The corporation created in Rajasthan in 1985 was subsequently closed. Most of the states have only one FDC but two states have more than one forest related corporation, namely Karnataka (Karnantaka FDC, Forest Industries Corporation, & Cashew Development Corporation). In addition, there are two Federations, one in Madhya Pradesh, and the other in Chhattisgarh, for harvesting and marketing of NTEPs. These federations finally transfer the net profit to the primary societies of collection in the schedule areas.

The functioning of these corporations is different in each State. State-wise brief scenario of the current status is as follows:

1. Andhra Pradesh: Andhra Pradesh Forest Development Corporation (APFDC) established in 1975 has an annual turnover of about Rs. 60 crores at present. About 83,700 ha forest land has been leased to APFDC. Out of this 65,177 ha plantation have been raised mostly with high productive Eucalyptus clones and bamboo, and in small areas with Cashew, Coffee, Teak, medicinal plants and other miscellaneous species too. The balance area of Eucalyptus of 18,492 ha was raised with seed origin plantations, which are gradually being replaced with clonal plantations. The corporation annually plants between 3000 and 6000 ha eucalyptus and produces round-wood/pulpwood between 100,000 to 200,000 m3.

2. Andaman & Nicobar Island: Forest Plantation and Development Corporation, a Government of India undertaking, was established in 1977 mainly to harvest timber, to manage the inaccessible forest and to undertake cultivation of red oil palm, rubber, spices, etc. The Corporation has three projects viz. Forestry project in Little and North Andaman Island, Red Oil Palm Project in Little Andaman Island and Rubber project in Katchal Island. The annual timber havesting had reached its peak to 49,000 m3 during 1990s. With the change in policy to conserving natural forests and rich biodiversity, and due to judicial intervention the harvesting of timber as well as extension of red oil palm plantation has been stopped since 2002, and leased forest area returned to the Forest Department. The present turnover (about Rs. 8 crores) is mainly from red oil palm (1560 ha) and rubber plantations (600 ha), and it is not enough to meet event the salary of the staff.

3. Arunachal Pradesh: Arunachal Pradesh Forest Corporation was established in 1977 mainly to harvest and market timber in the leased forest area by the Forest Department in Tirap and Changlang districts of the state as well as to establish a few wood based industries. Plantations of rubber, tea and coffee were also raised in a few hundred ha area. The harvesting of the timber reached to 49,000m3. The felling operations were stopped in 1996 and two wood based industries were closed by the order of Supreme Court because of excessive felling of tress without Working Plans. There has been almost no activity since then and most of the staff has been gradually retrenched as there are not enough funds to pay the salary to the staff.

4. Bihar: Bihar Forest Development Corporation (FDC) was established in 1975 mainly for harvesting and marketing of NTEPs of which tendu leaf was a major product. After the bifurcation of the state in 2000, the harvesting and marketing of NTFPs was transferred village Panchayat in 2004. Bihar FDC is almost non functional since then, and even the staff is not able to get their salary.

5. Chhattisgarh: Though FDC was created in 1976, after bifurcation of the state from Madhya Pradesh in 2000 it was re-established in 2001, and the annual turnover is of about Rs. 45 crores at present. About 197,000 ha forest land has been leased to the Corporation. Raising of commercially important species like teak and bamboo and their harvest and trade as well environmental plantations in industrial areas on turnkey basis (deposit work) are the major activities. In the leased are, teak is planted between 2,000 and 3,000 ha annually and total area under teak at present is about 85,000 ha. About 8,000 ha has been covered under environmental plantations.
The State Minor Forest Produce (Trading & Development) Co-operative Federation functioning in the erstwhile Madhya Pradesh was split after the constitution of Chhattisgarh State, notified in October 2000. It is functioning on the same lines as in Madhya Pradesh. At present there are about 10,000 collection centres spread over the length and breadth of the state and approximately 9.78 lakhs forest produce gatherers. Since 2008, 80 per cent of profit is given as incentive wages to the collectors of tendu leaves, 15 per cent of profit is kept for collection, sale, storing in godowns and value addition of non-nationalised minor forest produce, and 5 per cent of profit for the temporary reimbursement of losses of societies.

6. Gujarat: The FDC was created in 1976 has an annual turnover of about Rs. 30 crores. Broadly there are 6 activities (i) Manufacturing of furniture mainly for Government institutions called Vanil Udyog, (ii) Harvest and marketing of non-timber forest produce of non-scheduled as well as scheduled area (major area) and sharing 100 per cent net profit of scheduled area to Panchayats (for about 5-6 years harvest and trading was done by Panchayats until 2004 but the system did not work), (iii) Raising commercial plantations mainly clonal Eucalyptus in 5,000 ha forest land allocated to FDC, (iv) collection and trading of charcoal manufactured by local people and Panchayats, (v) Raising plantations for public sector undertakings on contract basis and (vi) Making herbal products from medicinal plants under the scheme Dhanvantri. At present, Vanil Udyog and NTEPs from the bulk of the commercial activity.

7. Haryana: Haryana Forest Development Corporation (HFDC) was established in December 1989 under the Companies Act, 1956. The annual turnover is of the order of Rs. 37 crores at present. HFDC was created mainly to assure reasonable support price to farmers for their standing trees and other forest produce, to raise nurseries and plantations, to promote tree plantation on non-forest lands, and to establish forest based industries. HFDC is also harvesting trees and marketing timber from earmarked areas of forest lands since 1995-96 and pays royalty to Forest Department in lieu. The farmers can also sell their standing trees to HFDC and generally, eucalyptus and poplar are grown under Agro-forestry and are marketed on the ground at a support price fixed by the government from time to time. The harvesting of timber has increased in recent years due to widening of highways and is about 70,000 m3 annually.

8. Himachal Pradesh: Himahcal Pradesh State Forest Development Corporation was established in 1974. The turnover at present is about Rs. 150 crores with approximate profit of Rs. 15 crores. Initially, the working of Rosin and Turpentine Factories at Nahan and Bilaspur were taken over and subsequently Resin extraction operation was also taken over. In 1983, timber harvest and marketing including bamboo for whole state became the major activity of the corporation. Felling of schedule species from private areas was also included in 1982. The current annual timber harvest ranges between 250,000 to 300,000 m3. The corporation also undertakes harvest and marketing of katha and fuelwood. Of the total turnover about 60 per cent is from timber, 40 per cent from rosin and turpentine oil and rest from others. Corporation is diversifying its activities towards ecotourism also.

9. Jammu and Kashmir: The Jammu & Kashmir State Forest Corporation, a statutory body, was established under the Jammu and Kashmir State Forest Corporation Act, 1978 by merging the erstwhile Government Lumbering Undertaking (GLU), which used to carry out extraction and sale of timber in the state. The main objective of Corporation is to undertake removal and disposal of trees and exploitation of forest resources entrusted to it by the Government of Jammu and Kashmir. The current activity is confined to removal of dead and dying trees, which on an average is 50,000 m3 annually. The annual turnover is about Rs. 60 crores with net profit of about Rs. 2 crores.

10. Jharkhand: Jharkhand Forest Development Corporation was re-established in 2002 after bifurcation of the state from Bihar to carry on the earlier activities of the Bihar Forest Corporation mainly to harvest NTEPs. During 2007 harvesting of all NTEPs except tendu leaf was handed over to Gram Sabha. Current turnover, mostly from tendu leaf trade, is about Rs. 45 crores.

11. Karnataka: (i) The Karnataka Forest Development Corporation (KFDC) was established in 1971 with the main objective to raise plantations to commercially viable species (rubber, pulpwood, teak and bamboo). Plantations of Eucalyptus, Acacia, Bamboo, Casuarina, Teak and Tamarind have been raised in total of 44,792 ha forest land received on lease. In addition, forest land of 4,443 ha under rubber plantation is maintained and rubber latex is processed in its two factories. The pulpwood and rubber latex produced are sold to industries. The Corporation at present is giving an annual turnover of Rs. 42 crores.

(ii) The Karnataka State Forest Industries Corporation was incorporated in the year 1973, under the Companies Act, 1956 with the main objective to harvest forest produce for supply to pulpwood and rayon industries, processing of wood, and manufacture of furniture and wood based construction material. The current activities include making of furniture, doors and windows, fuelwood supply to public and salvage timber from forest and harvest of pulpwood. During 2009-10, corporation sold fuelwood worth Rs. 4.4 crore and harvested/salvaged 19,635 m3 timber.

(iii) Karnataka Cashew Development Corporation was incorporated in 1978 under the Companies’ Act 1956, with the main objective of taking over the existing cashew plantation for intensive development and to raise new cashew plantation in the state to attain increased productivity. The Corporation has maintained 12,738.5 ha of older cashew plantations transferred towards equity and another 12,919.6 ha of cashew plantation on lease from Forest Department. The corporation planted about 9030 ha within older plantations with high yielding variety grafts during 1992-2008 but still the yield from plantations is poor. The total revenue realised from the sale of cashew plantations during 2009-10 was about Rs. 3.43 crore and was sufficient to pay the salary of the staff.

12. Kerala: Kerala Forest Development Corporation was established in 1975 in Kottayam with specific purpose to raise industrial plantations, spices, cashew, tea, coffee, etc. and to process and trade. The Corporation has established pulpwood (Eucalyptus, Acacia, etc.) in 6000 ha, teak and pulpwood in 1400ha, coffee in 200 ha, cashew in 320 ha and tea in 100 ha. The annual turnover at present is about Rs. 20 crores, about 70 per cent of which comes from wood crop items.

13. Madhya Pradesh: Madhya Pradesh Rajya Van Vikash Nigam was established in 1975 with the main objective to replace low value and inferior forests with high value multi utility species. Commercial planting of teak and bamboo is the main activity. Current annual turnover is more than Rs. 110 crore with net profit of about Rs. 10 crore. The leased area to the corporation has gradually increased over the years. The current leased are is 425,000 ha, against which teak has been planted in 164,932 ha and bamboo in 20,769 ha until March 2010. Annual planting of teak ranges between 6,000 to 8,000 ha and average annual harvesting of timber from the leased area is about 100,000 m3.
In order to give benefits to forest dwellers in collection and trade of forest produce, the Madhya Pradesh State Minor Forest Produce (Trading & Development) Co-operative Federation was formed in 1984. This Federation coordinates the collection and processing of tendu leaves, sal seed and Kullu Gum through Primary Forest Produce Co-operative Societies at district level and organizes disposal of these produce. In addition, other non-nationalised Non Wood Forest Products (NWEPs) are also being collected and traded by these Co-operative Societies. It also processes and markets herbal products and honey. However, after 73rd Amendment to the constitution in 1996 providing devolution of power to the Panchayati Raj Institutions the net income from the trade of NWEP is being transferred to the Primary Forest Produce Societies, who in-turn distributes 60 per cent of the profits to the Primary Collectors. 20 per cent of the profit is kept for the development of NWEP and the rest for infrastructure development.

14. Maharashtra: The FDC created in 1974 has an annual turnover of about Rs. 130 crore at present. The broad objective is to raised plantations of species yielding high revenue in place of low value miscellaneous forests and generate employment. Some new activities like raising of forest plantations in private lands of Public Sector Undertaking (PSU) on turnkey basis and promotion of eco-tourism has been added. At present, FDC has 393,051 ha forest area on lease from the Maharashtra State Government. Seed unit and nurseries of the FDC have been awarded IS/ISO 9001: 2008 certificate b y Bureau of Indian Standards. Teak is a flagship spices and about 139,000 ha area is under teak plantations. Majority of these plantations (about 124,000 ha) were raised during the period 1969 to 1987. The present plantation rate is 1200 to 1600 ha per annum only.

15. Meghalaya: Meghalaya FDC was established in 1975 under Companies Act 1956 with authorized share capital of Rs. 2 crore mainly to harvest timber from government forests and to enter into timber trade. Two saw mills were opened. It worked under profit until 1991. Since area of government forest is very little (as 85 per cent of the Meghalaya forests are with autonomous district council) and focus has shifted on biodiversity conservation, the activity is confined to running of saw mills. The FDC has not been able to prepare the balance sheet for about 10 years and the annual turnover is of the order of Rs. 2 crores.

16. Odisha: Odisha FDC came into being in 1990 by merging all forest corporations of the state which including Odisha Forest Corporation (1962), its subsidiary Odisha Composite Board (1983), Similipahar Forest Development Corporation (1979) and Odisha Plantation Development Corporation Limited (1985). Annual turnover at present is about Rs. 75 crores which excludes the sale proceeds of tendu leaf (approx Rs. 300 crores) as it is returned to Forest Department after deducting 10 per cent commission. It presently undertakes (i) trade of salvage timber/firewood (ii) trade of processed and phal Kendu leaves (iii) collection and trade of Sal seed directly or through Raw Material Procurer (RMP) (iv) regulate the distribution of firewood, long Bamboo and other small timbers to local people (v) monitor Bamboo operation directly or through RMP (vi) trade of cashewnut and rubber harvested through plantations (vii) collection, processing and trade of honey and few NTEPs. Odisha is the 3rd largest producer of tendu (bidi) leaf next to Madhya Pradesh and Chhattisgarh. The annual production of tendu leaf in Odisha is around 4.5 to 5 lakhs quintal produced in all the 30 districts of the state, which is about 20 per cent of the country annual production.

17. Punjab: The Punjab State Forest Development Corporation was established in 1983 under the Companies Act, 1956 and the annual turnover is nearly Rs. 34 crore, at present. The main activity of the Corporation is to harvest and market timber from forest marked by the Forest Department and pay royalty in turn. The current timber production is to the tune of 72,000 m3, 70 per cent of which comes from tree felling due to widening of national highways. In addition, Corporation also assists the farmers in production and marketing of their agro-forestry produce (mainly eucalyptus and poplar). The Corporation also runs saw mills and carpentry units and promotes use of eucalyptus and poplars, and nowadays it is venturing into ecotourism.

18. Tamil Nadu: (i) Tamil Nadu Forest Plantation Corporation Limited (TAFCORN) was incorporated under the provisions of the Companies Act, 1956 and 1974 with the main objective to raise, maintain and harvest pulpwood and cashew to meet the needs of industries and to supply firewood to meet the fuelwood needs of the public. The 74,984 ha of forest land has been leased out by the Forest Department to the Corporation. The main species grown are eucalyptus and cashew. Teak, casuarinas, bamboo etc., are also grown in smaller extent and they are being maintained and harvested properly.

(ii) Arasu Rubber Corporation is a Government of Tamil Nadu Company functioning under the Tamil Nadu Company functioning under the Tamil Nadu Department of Environment and Forest since 20th August 1984. The Corporation is ISO 9001: 2008 Certified and maintain 4,280 ha of rubber plantations located within Kanyakumari district, the only suitable district for the growth of rubber in the state. The objective of the Corporation is to safeguard the future of rubber plantation industry and to increase employment opportunities, particularly for surplus rubber plantation labourers, the repatriates from Sri Lanka. Around 2,200 tonnes of natural rubber is produced per year including Cenex having ISI standard. The annual turnover is around 23 crores.

(iii) Tamil Nadu Tea Plantation Corporation Limited (TANTEA), an undertaking of the State Government of Tamil Nadu, India was established in 1968, to rehabilitate Sri Lankan repatriates trained in the fine art of tea culture. The corporation raised tea plantation in an area of 4,432 ha and produces about 10,421 tonnes of high grown clonal tea in tea factories located within plantations.

19. Tripura: Tripura Forest Development and Plantation Corporation Limited (TFDPC) was established in the year 1976 under the Companies Act, 1956 and the present turnover is Rs. 45 crore with net profit of Rs. 16 crore. The main objective of the Corporation is to carry out business in rubber cultivation, its processing and promotion as well as of bamboo based industries and also to provide livelihood support to tribals. The corporation has raised 11,000 ha rubber plantation of which about 4,000 ha are in productive state and annually yielding about 3,000 mt of raw/processed latex. A Rubber Timber processing unit manufactures rubber wood furniture and solid Rubber wood board. The Corporation has provided settlement to more than 2,700 tribal families for their permanent settlement, who were practicing shifting cultivation, by providing each family one hectare of rubber plantation.

20. Uttar Pradesh: Uttar Pradesh Forest Corporation was established in 1974 under State’s Local Bodies Act and not under Company’s Act like other States FDCs. The annual turnover is of the order of Rs. 300 crore at present. Its main activity is to harvest and market the forest produce on a planned basis throughout the state. The trees and other produce (bamboo and tendu leaf) marked by the Forest Department are harvested and marketed by the Corporation after paying the royalty. At present the average annual production of round timber by the Corporation is about 300,000m3. The production of timber has increased due to widening of roads resulting into felling of large number of mature trees standing along notational highways.

21. Uttarakhand: Till the creation as a separate state in November 2000 the activities of Uttar Pradesh Forest Corporation were extended in Uttarakhand. After the creation of a separate state, Uttarakhand Forest Corporation was established in 2001, and the activities identical to UP Forest Corporation have been continuing. The current turnover is about Rs. 300 crore. The annual harvest of the timber is to the tune of 230,000 m3 contributing to about 75 per cent commercial activity of the corporation. Ecotourism has been taken as a new activity of the corporation.

22. West Bengal: The West Bengal Forest Development Corporation (WBFDC) came into existence in 1974 and has an annual turnover of Rs. 90 crore and net profit of about Rs. 5 crores. The main activities of the corporation is harvesting and marketing of timber, poles, pulpwood and firewood on agency basis from all the territorial forest division of the state, to manage the 40,000 ha of forest area on lease, running of four saw mills, treating and marketing of sawn timber, and market bio-fertilizers through a joint venture and collect, processes and markets of Sunderban honey to the tune of 35-40 MT annually. About 20,000 to 25,000 m3 round timber sold every year. Citronella oil from Citronella grass, of Java variety grown in the foot hills of North Bengal, is also produced in the distilleries of WBFDC Ltd.

Source: ICFRE.2010. Forest Sector Report India 2010

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